Case Details: Chakra Cements Ltd. vs. Employees Provident Funds, Appellate Tribunal - [2025] 180 taxmann.com 211 (HC-Andhra Pradesh)
Judiciary and Counsel Details
- Dhiraj Singh Thakur, CJ. & Ravi Cheemalapati, J.
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K. Venugopal Reddy for the Appellant.
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T. Balaji, SC for the Respondent.
Facts of the Case
In the instant case, the Appellant factory was engaged in the manufacture of cement with a workforce of more than 100 employees and was covered by the EPF Act. A complaint from the staff and workers’ union alleged that about 75 workers were not enrolled for provident fund benefits.
The Respondent no.2 (RPFC) initiated proceedings under Section 7A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, appointed a commission, conducted enquiry and physical verification, and found that although there was no conclusive proof supporting allegation regarding non-enrolment of 75 workers, certain persons engaged for appellant’s work through security agencies, for loading and unloading, office/factory maintenance, and pay-loader operations had been paid wages but were not extended provident fund benefits.
Further, the dues for the period April 1999 to March 2003 were determined at about Rs. 8.09 lakhs. On appeal, the Employees’ Provident Funds Appellate Tribunal confirmed the determination made by the respondent no. 2.
The Single Judge dismissed the Appellant’s writ petition challenging the Tribunal’s order. Thereafter, an appeal was made before the High Court.
It was noted that the word ’employee’ under Section 2(f) of the Act, includes persons employed by or through a contractor in or in connection with work of establishment. Further, the employees engaged by security agencies, for loading and unloading, office maintenance/factory maintenance and Pay Loader work in respect of whom provident fund benefit was not extended according to the Provident Fund authorities, could not be equated to that of persons employed for a short period on account of some passing necessity or some temporary emergency beyond the control of the company.
High Court Held
The High Court observed that the employees referred to above would be covered by the definition ’employee’ as defined under Section 2(f), and the employer must extend the benefit of the EPF Act to those employees.
Further, the High Court observed that amounts specified in Annexures A and B were determined without identifying workers who had worked with the establishment, the order passed by the RPFC was to be set aside so far as it related to the determination of dues in respect of unidentified workers.
The High Court held that the rest of the order, so far as it related to workers identified and specifically mentioned therein, was to be confirmed. Further, the RPFC was at liberty to identify workers who had worked during the relevant period and then pass an order in respect of those employees.
List of Cases Referred to
- Provident Fund Inspector v. T. S. Hariharan AIR 1971 SC 1519 (para 6)
- Karachi Bakery v. Regional Provident Fund Commissioner 1990 Law Suit (AP) 61 (para 6).
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